US employers plan to cut payrolls by 31,434 in June: Challenger

There were 31,434 job cuts in the month of June, which is the lowest level of the year. John Challenger, Challenger, Gray and Christmas CEO, discusses where the most job cuts are taking place.

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After climbing to a 15-month high in May, planned job cuts announced by U.S. companies in June dropped 41 percent to 31,434, the lowest level of the year, according to a report released Thursday by Challenger, Gray & Christmas. So far, the pace of job cuts is down 5 percent from a year ago.

June job cuts were 20 percent lower than the same month a year ago, when employers announced 39,372 job cuts.

The June number was down sharply from May, with 52,961 planned layoffs announced—the largest monthly total since February 2013.

"Layoffs are very light. Lowest we've seen this year. Companies that are laying off people are often doing it because of mergers and acquisitions, not because they're revenues are down," John A. Challenger, CEO of Challenger, Gray & Christmas, said on "Squawk Box." "So these are positive reasons, really, for why we see big layoffs in times like this. The economy, from a labor standpoint, is in a very good shape."

In the second quarter, a total of 124,693 job cuts were announced, up 3 percent from the 121,341 job cuts announced in the first quarter. Second-quarter job cuts also were up 9.5 percent from the same period last year, when 113,891 planned layoffs were announced.

New Jersey-based employers were hit hard by June layoff activity, accounting for three of the top four job-cut announcements during the month. The closures of two Atlantic City casinos and a Westhampton-based transportation firm resulted in nearly 7,000 job cuts.